Golar LNG Partners Net Income Slides (Bermuda)

Golar LNG Partners reported net income of $19.5 million and operating income of $31.8 million for the first quarter of 2012, as compared to $23.8 million and $30.4 million,  for the first quarter of 2011^.

While operating results were improved in comparison to the first quarter of 2011, net income was lower largely due to the interest cost associated with debt incurred to acquire the Golar Freeze which is not reflected in the historical results.

Operating results for the first quarter of 2012 were improved compared to the same period in 2011 due to increased revenue as a result of inflation escalators within the Petrobras charters and reduced administrative costs, offset in part by higher operating costs. Operating costs were higher in the first quarter of 2012 largely as a result of annual scheduled maintenance work on the two FSRU vessels operating in Brazil. It is anticipated that operating income from the two Brazilian FSRUs will increase during the balance of the year due to increased charter hire, as a function of the operating element hire rate escalation and lower expected operating costs. All vessels operated well throughout the quarter with 100 per cent utilization.

Net interest expenses increased to $7.8 million for the first quarter of 2012 compared to $3.7 million for the same period in 2011. As noted above, this was principally due to additional interest cost associated with the $222 million loan from Golar LNG Limited in connection with the acquisition of the Golar Freeze.

Other financial items increased $1.6 million to a loss of $1.6 million for the first quarter compared to the same period in 2011. The variance mainly relates to the changes in non-cash mark-to-market valuations of financial derivative instruments, principally interest rate swaps that are hedges against future interest rate movements.

The Partnership’s Distributable Cash Flow^[2] for the first quarter of 2012 was $19.0 million as compared to $20.5 million in the fourth quarter of 2011. This is partly due to the fact that there is one less operating day in the first quarter of 2012 compared to the fourth quarter of 2012, resulting in $0.6 million lower revenue and due to the annual scheduled maintenance work referred to above that resulted in approximately $0.7 million additional operating expenses.

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LNG World News Staff, May 22, 2012